Obamacare Changes Could Affect More Than Individual Plans

Much of the focus on the republican effort to overhaul the American healthcare system has focused on the potential changes to the individual insurance market, but most Americans – approximately 159 million people – receive their coverage from their employer. So what impact would the American Health Care Act have on employer-sponsored insurance?

A recent article from the Wall Street Journal found a provision in the law that could permit employers to remove some of the protections employees currently enjoy. This amendment – added at the last minute – allows states to apply for waivers for two major ACA regulations including essential health benefits (EHB).

EHBs are 10 health services like maternity care, mental health care, and hospitalization that health plans must cover. Currently, the ACA prohibits plans from placing limits on these 10 benefits. In 2011, the Obama administration released guidance information employers that they are not by the requirements of their state and can choose the benchmark of another state – which was not a problem at the time because the ACA created a national set of benefits.

Fast-forward to 2017 and the AHCA, where if passed, employers could choose to benchmark to any state including states that have waived EHBs. This opens the door once again to allowing plans to impose limits and eliminate out of pocket caps.

“It’s huge,” said former acting administrator of the Centers for Medicare and Medicaid Services Andy Slavitt. “They’re creating a backdoor way to gut employer plans, too.”

However, not everyone agrees the impact will be that far reaching.

“The real question is, would employers do this? Many wouldn’t,” said senior vice president at the Kaiser Family Foundation Larry Levitt. “Many employers offer quality benefits to attract employees. But employers are always looking for ways to lower costs.”

Whether or not the AHCA pass the Senate in its current form, or what the consequence of this provision will be long term, are still up in the air. Be sure to check back as we follow this story and its impact on you and your plan.